If you’ve been putting off buying a home in Henrico County because you don’t have 20% saved, you’re not alone — and you may be waiting for something you don’t actually need. In neighborhoods like Short Pump, Glen Allen, and Twin Hickory, where home prices have climbed steadily over the past several years, that 20% target can feel like a finish line that keeps moving further away. The good news: it’s not the only path to homeownership.
Multiple low down payment mortgage options exist today, each designed for different buyers, different credit profiles, and different financial situations. Some require as little as 3% down. Some require nothing at all. But each program comes with its own eligibility rules, cost structure, and long-term trade-offs — and choosing the wrong one for your situation can cost you thousands over the life of the loan.
This is where working with a mortgage broker matters. A broker with access to multiple wholesale lenders can compare VA, FHA, conventional 97, USDA, and Virginia Housing programs side by side for your specific credit score, income, and target neighborhood. A single-shelf direct lender can only offer what’s on their own shelf.
Written by Duane Buziak, NMLS #1110647 | Coast2Coast Mortgage LLC, NMLS #376205 — Helping Henrico County families find their new homes since 2014.
Whether you’re eyeing a townhome near Dorey Park, a resale in Lakeside, or a new build in Wyndham, this guide covers the seven low down payment mortgage options Henrico County buyers should understand before they start shopping.
1. VA Loans: Zero Down for Eligible Veterans and Active-Duty Service Members
The Challenge It Solves
For eligible veterans, active-duty service members, and surviving spouses, the down payment barrier doesn’t exist. VA loans require 0% down — no exceptions, no workarounds needed. Yet many military-connected buyers in Henrico County don’t realize they qualify, or they assume the process is more complicated than a conventional loan. It isn’t.
The Strategy Explained
Henrico County has a meaningful military-connected buyer population, particularly among commuters tied to Defense Logistics Agency Richmond (formerly Defense Supply Center Richmond) and Fort Gregg-Adams. For these buyers, the VA loan is often the most financially advantageous program available — not just because of the zero down payment, but because VA loans carry no private mortgage insurance requirement, which eliminates a cost that FHA and conventional borrowers pay every month.
A VA funding fee applies — for a first-time use with 0% down, that fee is approximately 2.15% of the loan amount and can be financed into the loan rather than paid at closing. On a $425,000 purchase, that’s roughly $9,138 rolled into the loan balance. There’s no PMI. There’s no down payment. And rates are typically competitive because multiple VA-approved wholesale lenders are competing for the loan.
According to VA.gov, eligible borrowers include veterans who meet minimum service requirements, active-duty service members, National Guard and Reserve members under certain conditions, and eligible surviving spouses.
Implementation Steps
1. Obtain your Certificate of Eligibility (COE) — your broker can often pull this directly through the VA’s automated system without you doing it separately.
2. Confirm your entitlement status, especially if you’ve used a VA loan before — full entitlement means no loan limits apply.
3. Work with a broker who has access to multiple VA-approved wholesale lenders to compare rates and lender fees across investors, not just one source.
Pro Tips
VA loan rates vary meaningfully across wholesale lenders — a broker can shop multiple investors simultaneously without triggering multiple hard credit pulls. If you’re a surviving spouse or have a service-connected disability rating, ask specifically about the VA funding fee exemption, which could eliminate that cost entirely.
2. FHA Loans: 3.5% Down with Flexible Credit Qualification
The Challenge It Solves
Not every buyer has a pristine credit history. Life happens — medical bills, job changes, a difficult financial stretch. FHA loans exist specifically to serve buyers who are creditworthy but don’t meet the tighter standards of conventional programs. If your credit score is 580 or above, you can qualify for a 3.5% down payment. Scores between 500 and 579 may still qualify with 10% down, according to HUD.gov.
The Strategy Explained
On a $425,000 purchase, a 3.5% down payment is $14,875 — a fraction of the $85,000 required at 20% down. That’s a meaningful difference for a first-time buyer in Lakeside or Tuckahoe who has stable income but hasn’t had years to accumulate a large cash reserve.
The trade-off is mortgage insurance. FHA loans carry two layers: an upfront mortgage insurance premium (MIP) of 1.75% of the base loan amount — financeable into the loan — and an annual MIP paid monthly. On a $425,000 purchase with 3.5% down, the upfront MIP is approximately $7,086, financed in. The annual MIP is then calculated on the outstanding balance.
Here’s the critical trade-off: for FHA loans originated after June 2013 where the original down payment was less than 10%, the annual MIP remains for the life of the loan. It does not cancel automatically at 78% LTV the way PMI does on conventional loans. That ongoing cost is a real factor in the total cost of ownership over a 30-year term.
Implementation Steps
1. Pull your credit report and identify any accounts that could be addressed before application — even a modest score improvement can shift your rate tier.
2. Compare total monthly cost (principal, interest, MIP) against a conventional 97 option if your credit score is above 620 — the conventional path may be cheaper long-term.
3. Ask your broker to model both FHA and conventional scenarios side by side before you commit to a program.
Pro Tips
FHA MIP pricing can vary across wholesale lenders in ways that aren’t obvious to buyers working with a single-shelf source. A broker comparing multiple FHA-approved investors may find meaningfully different total payment structures on the same loan amount. Also: gift funds are an acceptable source for FHA down payments, which matters for buyers with family support.
3. Conventional 97 and 3% Down Programs: HomeReady and Home Possible
The Challenge It Solves
Many buyers assume that conventional loans require at least 5% down and strong credit. That’s not accurate. Fannie Mae’s HomeReady and Freddie Mac’s Home Possible programs both allow 3% down payments — and unlike FHA, the PMI on these loans can be cancelled once you reach 78% loan-to-value. For buyers with credit scores above 620, the long-term cost structure of a conventional 97 loan often beats FHA by a significant margin.
The Strategy Explained
On a $425,000 Glen Allen purchase, 3% down is $12,750 — slightly less than the FHA minimum of $14,875. But the bigger advantage is what happens over time. Under the Homeowners Protection Act, conventional PMI must be automatically cancelled when the loan balance reaches 78% of the original purchase price. With FHA, that cancellation doesn’t happen if your original down payment was under 10%.
HomeReady (Fannie Mae) and Home Possible (Freddie Mac) both carry income limits — generally 80% of area median income for the property’s census tract — and both require completion of a homebuyer education course. These aren’t obstacles; they’re checkboxes that a broker can walk you through efficiently.
For Short Pump and Wyndham buyers, the 2026 conforming loan limit matters: the baseline is $806,500, according to the FHFA. Most purchases in these neighborhoods fall within that limit, meaning buyers can access conventional 97 pricing without jumping to jumbo loan territory.
Fannie Mae’s HomeReady program details and Freddie Mac’s Home Possible program details are publicly available and worth reviewing.
Implementation Steps
1. Confirm your income relative to the area median income for your target neighborhood — your broker can run this check instantly.
2. Complete the required homebuyer education course (Framework or HUD-approved equivalent) — it typically takes a few hours online and is low-cost.
3. Compare PMI rates across multiple conventional investors through your broker, since PMI pricing varies by lender and credit score tier.
Pro Tips
If your credit score is between 620 and 659, conventional PMI pricing may be higher than you expect — run the full comparison against FHA before deciding. Scores above 720 typically see the most favorable conventional PMI rates, making the long-term cost advantage over FHA most pronounced at that tier.
4. USDA Rural Development Loans: Zero Down in Qualifying Virginia Locations
The Challenge It Solves
USDA loans are one of the most overlooked zero-down options in Virginia — partly because buyers assume “rural” means remote farmland. In reality, many suburban and outer-ring areas near Henrico County qualify under USDA’s property eligibility map. If you’re open to properties in Goochland, New Kent, or the outer edges of Hanover County, a USDA loan may be an option worth exploring.
The Strategy Explained
The USDA Single Family Housing Guaranteed Loan Program requires 0% down payment and is available to buyers whose household income does not exceed 115% of the area median income for the target location, according to USDA.gov. Income limits vary by county and household size, so the specific threshold for a Henrico-adjacent purchase depends on exactly where you’re buying.
USDA loans carry a guarantee fee structure similar to VA’s funding fee. The upfront guarantee fee is approximately 1% of the loan amount — on a $425,000 purchase, that’s $4,250, which can be financed into the loan. An annual fee (currently 0.35% of the outstanding balance) is paid monthly, similar to MIP or PMI.
Property eligibility is determined by location. You can check a specific address using the USDA eligibility map. Not all properties near Henrico’s outer ring qualify, but many do — and it’s a quick lookup that takes less than a minute.
Implementation Steps
1. Search the USDA eligibility map for any specific addresses you’re considering — eligibility is property-specific, not county-wide.
2. Confirm your household income against the USDA income limits for the target county — your broker can pull the current limits for Goochland, New Kent, or Hanover.
3. Compare total monthly payment (including the annual fee) against FHA and conventional 97 options to confirm USDA is the most cost-effective path for your situation.
Pro Tips
USDA processing times can run slightly longer than conventional or FHA loans because the loan requires USDA conditional commitment before closing. Build that timeline into your offer strategy. A broker experienced with USDA wholesale lenders can often identify which investors close USDA loans most efficiently in Virginia.
5. Virginia Housing Down Payment Assistance Programs
The Challenge It Solves
Even a 3% or 3.5% down payment can feel like a stretch when you’re also budgeting for closing costs, moving expenses, and reserves. Virginia Housing (formerly VHDA) offers down payment assistance programs that can reduce or eliminate the out-of-pocket down payment for income-qualifying buyers — particularly relevant for buyers in Tuckahoe, Lakeside, and the Dorey Park area where purchase prices fall within program limits.
The Strategy Explained
Virginia Housing’s down payment assistance is structured as either a second mortgage or a grant, depending on the specific program. These funds can be layered with a Virginia Housing first mortgage to cover the required down payment. Purchase price limits and income limits apply, and they vary by household size and location, according to VirginiaHousing.com.
All Virginia Housing programs require completion of a homebuyer education course before closing. This is a firm requirement, not optional — and it’s a reasonable one. The course covers budgeting, the purchase process, and long-term homeownership responsibilities.
The broker access advantage is real here: not every lender is approved to originate Virginia Housing loans through the wholesale channel. A broker who is connected to Virginia Housing-approved wholesale investors can access these programs for clients — a single-shelf lender who isn’t a Virginia Housing partner cannot.
Implementation Steps
1. Review current Virginia Housing income and purchase price limits for Henrico County at VirginiaHousing.com — limits are updated periodically.
2. Complete the required homebuyer education course early in the process — it can be done online and shouldn’t delay your timeline if you start it promptly.
3. Confirm with your broker that they have access to Virginia Housing-approved wholesale lenders before assuming the program is available to you through their channel.
Pro Tips
Virginia Housing DPA should not be confused with grant programs that eliminate repayment entirely in all cases — the second mortgage structure requires repayment under certain conditions depending on the program chosen. Ask your broker to explain the specific repayment terms before you commit. Also: no double-stacking of multiple grant sources is permitted under program rules.
6. The NoTouch Credit Pull Advantage: Shop All Programs Without Damaging Your Score
The Challenge It Solves
Here’s a problem most buyers don’t know exists until it’s too late. When you contact a single-shelf direct lender to ask about your options, they typically require a hard credit inquiry before they’ll quote you a rate or confirm which programs you qualify for. That hard pull hits your credit report. If you contact three lenders to compare, that’s three hard pulls — and for buyers near the credit score thresholds that determine FHA vs. conventional 97 eligibility, that can materially affect which programs are available to you.
The Strategy Explained
Duane Buziak’s NoTouch Credit Pull pre-qualification process works differently. The initial pre-qualification does not trigger a hard inquiry on your credit report. That means you can understand which low down payment programs you’re eligible for — VA, FHA, conventional 97, USDA, Virginia Housing — before any lender has pulled your credit hard.
This matters especially for buyers in the 580–640 credit score range, where the difference between a 579 and a 580 score determines FHA eligibility at 3.5% down, and where the difference between a 619 and a 620 score affects conventional PMI pricing. Knowing your options before triggering a hard pull gives you time to address any quick-fix items on your report before the formal application.
Once you’ve selected the right program and lender, a single hard pull is done for the actual application — not multiple pulls across multiple lenders. This is a structural advantage of working with a broker who shops multiple wholesale sources under one inquiry.
Implementation Steps
1. Start with the NoTouch Credit Pull pre-qualification at HenricoMortgage.com — no credit impact, no obligation.
2. Review the program comparison your broker produces across all eligible options — VA, FHA, conventional 97, USDA, and Virginia Housing where applicable.
3. Identify any credit report items worth addressing before the formal application, then proceed with a single hard pull when you’re ready to move forward.
Pro Tips
If you’re within 30–60 days of being ready to make an offer, the NoTouch pre-qualification gives you a clear picture of your buying power without starting the credit clock. Sellers in competitive Henrico neighborhoods like Glen Allen and Innsbrook expect pre-qualification letters — having one that didn’t cost you credit score points is a meaningful advantage.
7. How to Choose the Right Low Down Payment Option for Your Henrico Home Purchase
The Challenge It Solves
Understanding each program individually is useful. Knowing which one is right for your specific situation — your credit score, income, military status, target neighborhood, and how long you plan to stay in the home — is what actually moves you forward. This section brings it all together with a side-by-side comparison, a worked dollar example, and answers to the eight questions Henrico County buyers ask most often.
The Strategy Explained
The decision framework comes down to five variables: military eligibility, property location, credit score, income relative to area median, and expected time in the home. VA wins if you’re eligible — full stop. USDA wins if the property qualifies and you’re income-eligible. Between FHA and conventional 97, the credit score and expected stay in the home drive the answer. Virginia Housing DPA layers on top of either FHA or conventional for income-qualifying buyers who need help with the down payment itself.
Side-by-Side Program Comparison
| Feature | VA Loan | FHA Loan | Conventional 97 | USDA Loan |
|---|---|---|---|---|
| Minimum Down Payment | 0% | 3.5% (580+ score) | 3% | 0% |
| Mortgage Insurance | None (funding fee applies) | Lifetime MIP if <10% down | Cancellable PMI at 78% LTV | Annual fee (0.35%), cancellable |
| Minimum Credit Score | Varies by lender (typically 580+) | 580 for 3.5% down | 620 (HomeReady/Home Possible) | Typically 640+ |
| Income Limits | None | None | 80% of area median income | 115% of area median income |
| Property Restrictions | Must be primary residence | Must meet FHA standards | Standard conventional | Must be in eligible rural/suburban area |
| Military Eligibility Required | Yes | No | No | No |
| 2026 Loan Limit (Henrico) | No limit with full entitlement | $806,500 baseline | $806,500 baseline | No set limit (income-based) |
| Broker Advantage | Multiple VA investors, competitive rate shopping | MIP pricing varies by wholesale lender | PMI rates vary across investors | Investor efficiency for VA closings varies |
Worked Dollar Example: $425,000 Glen Allen Purchase
Let’s put real numbers on a representative Henrico County purchase — $425,000, which is consistent with resale pricing in Glen Allen and Lakeside neighborhoods.
20% Conventional (no PMI): $85,000 down payment required. Most buyers in this article’s target segment don’t have this sitting in a savings account, which is exactly why these programs exist.
VA Loan (0% down): $0 down payment. VA funding fee for first use at 0% down: approximately 2.15% of $425,000 = $9,138, financeable into the loan. No PMI. Monthly payment based on $434,138 financed at current market rate.
USDA Loan (0% down): $0 down payment. Upfront guarantee fee: approximately 1% of $425,000 = $4,250, financeable. Annual fee of 0.35% paid monthly. Property must be in a USDA-eligible location — confirm before assuming eligibility.
Conventional 97 / HomeReady (3% down): $12,750 down payment. PMI applies until 78% LTV, then cancels automatically per the Homeowners Protection Act. Best long-term cost structure for buyers with 620+ credit scores who don’t have VA eligibility.
FHA (3.5% down): $14,875 down payment. Upfront MIP: 1.75% of $410,125 base loan = approximately $7,177, financeable. Annual MIP paid monthly for the life of the loan if original down payment was under 10%. Total cost over 30 years is higher than conventional 97 for buyers with 620+ scores.
Virginia Housing DPA: Potentially reduces or eliminates the down payment for income-qualifying buyers. Closing costs are separate and additional in all scenarios above. No-out-of-pocket closing options exist as a separate strategy and should not be conflated with down payment minimums.
Implementation Steps
1. Determine military eligibility first — if you or your spouse qualify for a VA loan, model that scenario before any other.
2. Check USDA property eligibility for any addresses you’re seriously considering — it takes one minute and could open a zero-down path.
3. If neither VA nor USDA applies, compare conventional 97 vs. FHA based on your credit score and expected time in the home — a broker can model both scenarios with real numbers in a single conversation.
8-Question FAQ: Low Down Payment Mortgages in Henrico County
1. Can I use gift funds for a low down payment mortgage?
Yes. FHA, conventional 97 (HomeReady and Home Possible), and VA loans all permit gift funds from eligible donors — typically family members — to cover all or part of the down payment. Documentation requirements vary by program, and your broker will walk you through the gift letter process. USDA also permits gift funds in most cases.
2. What credit score do I need to qualify for a 3% down conventional loan?
Fannie Mae HomeReady and Freddie Mac Home Possible both require a minimum 620 credit score for 3% down conventional financing. Scores above 720 typically access the most favorable PMI rates, which improves the long-term cost advantage over FHA. If your score is below 620, FHA at 3.5% down is generally the next option to evaluate.
3. Can I combine Virginia Housing down payment assistance with an FHA loan?
Yes. Virginia Housing offers DPA programs that can be layered with an FHA first mortgage for income-qualifying buyers. Purchase price and income limits apply, and homebuyer education is required. Your broker must be approved to originate Virginia Housing loans through the wholesale channel — confirm this before assuming availability.
4. Does FHA mortgage insurance (MIP) ever go away?
For FHA loans originated after June 2013 where the original down payment was less than 10%, the annual MIP remains for the life of the loan — it does not cancel automatically, according to HUD.gov. If you put 10% or more down on an FHA loan, MIP cancels after 11 years. This lifetime MIP is a key reason buyers with 620+ credit scores often find conventional 97 to be a better long-term value.
5. What is the 2026 conforming loan limit in Henrico County, Virginia?
The 2026 baseline conforming loan limit is $806,500, effective January 1, 2026, per the FHFA. Henrico County is not designated as a high-cost area, so this baseline limit applies. Purchases at or below $806,500 can use conventional financing, including conventional 97 programs. Purchases above this threshold move into jumbo territory with different qualifying requirements.
6. How long does a NoTouch Credit Pull pre-qualification take?
The NoTouch Credit Pull pre-qualification with Duane Buziak typically takes less than 24 hours once you’ve submitted your basic financial information. Because it does not trigger a hard inquiry, there’s no credit impact while you’re getting your bearings on which programs you qualify for. You can start the process at HenricoMortgage.com at any time.
7. Do VA loans have income limits?
No. VA loans do not have income limits. Eligibility is based on military service history, not income. Lenders will evaluate your debt-to-income ratio as part of the qualification process, but there is no program-level income ceiling. This distinguishes VA from USDA and HomeReady/Home Possible, both of which carry income limits relative to area median income.
8. What is the USDA income limit for Henrico County buyers?
USDA income limits are set at 115% of the area median income for the target property’s location and vary by household size. Because USDA eligibility is tied to the property address rather than the county as a whole, income limits for a purchase in Goochland or New Kent may differ from a property on Henrico’s outer boundary. Your broker can pull the current limit for any specific address you’re evaluating. Check the USDA eligibility map for property-level confirmation.
Pro Tips
The single most common mistake Henrico County buyers make is choosing a program based on the down payment alone without modeling the total monthly cost over their expected time in the home. A slightly higher down payment on a conventional loan can eliminate years of PMI payments and result in lower total cost. Run the full scenario — not just the entry cost — before committing.
Putting It All Together: Your Path to Homeownership in Henrico County
Low down payment mortgage options are not a compromise or a consolation prize. They are purpose-built federal and state programs designed to help creditworthy buyers enter the market without waiting years to accumulate 20% — and in neighborhoods like Short Pump, Glen Allen, Innsbrook, and Lakeside, where prices have moved steadily upward, that access matters.
The right program for you depends on a specific combination of factors: military eligibility, property location, credit score, household income relative to area median, and how long you plan to stay in the home. No single program is right for every buyer, and no single-shelf direct lender can show you all of them. A mortgage broker with access to multiple wholesale lenders can run that comparison across every eligible program simultaneously — VA, FHA, conventional 97, USDA, and Virginia Housing — and show you real numbers, not estimates.
Duane Buziak, NMLS #1110647, at Coast2Coast Mortgage LLC, NMLS #376205, has been helping Henrico County homebuyers navigate exactly this decision since 2014. From first-time buyers in Tuckahoe to move-up buyers in Twin Hickory, the approach is the same: compare every eligible option, model the real cost, and put you in the program that serves your long-term financial interest — not just the one that’s easiest to close.
Your dream home in Henrico County is closer than you think. Get pre-qualified today and discover exactly what you can afford through a credit-safe pre-qualification process that protects your score while unlocking every option available to you.